Iran private sector calls for specific banking channels to boost India trade

Iran Chamber of Commerce President Shafei is leading a delegation of 30 businessmen in a 3-day visit to India accompanying Foreign Minsiter Mohammad Javad Zarif. Banking relations and Chabahar Port investment are high on the agenda.

8 January 2019
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Iran Chamber of Commerce President Shafei is leading a delegation of 30 businessmen in a 3-day visit to India accompanying Foreign Minsiter Mohammad Javad Zarif. Banking relations and Chabahar Port investment are high on the agenda.

ICCIMA President, Gholam Hossein Shafei, adrresses the India-Iran Business Forum in New Delhi on Tuesday.

Iran Chamber of Commerce president says he hopes new steps to clear Iranian export money with rupee ease banking relations between the two countries.

“Taking into consideration the recent agreements made regarding the banking mechanisms on rupees, we hope to witness efficacious evolvements in our banking relations,” Gholam Hossein Shafei, President of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) told the India-Iran Business Forum, that’s currently underway in New Delhi.  

Shafei is heading a delegation of 30 Iranian private sector businessmen in a three-day visit to India accompanying Foreign Minister Mohammad Javad Zarif, who aims to bolster the bilateral political and economic relation between the two countries.

Shafei welcome India’s move to replace its national currency with the US dollar as “good news” saying “it has expedited repayment of Iran’s oil sales debt.”  

India keeps buying Iranian oil after the US granted New Delhi a sanctions waiver. The country also lifted a heavy withholding tax from rupee payments to National Iranina Oil Company (NIOC), paving the way for the settlement of 1.5 billion dollars to Tehran.

Zarif has assured New Delhi that his country "is and will be a reliable oil supplier to India" while speaking to the reporters. The Iranian minister is expected to meet his Indian counterpart as well as Prime Minister Narandra Modi. 

However, he criticised that some payments for medical exchange between Iran and India have faced “difficulties”. These transactions were previously done through the UCO Bank and the Central Bank of India.

“One of the main outstanding issues between Iranian and Indian businessmen is banking transactions,” he also told reporters before the forum started in New Delhi.

He expressed hope that “creating a specific monetary and financial channel” could enhance medical trade between Iran and the South Asian nation. “Around 90 Iranian companies are currently working with Indian firms in the field of medicine,” he added.  

Chabahar Port

New Delhi has also invested millions of dollars in Iran’s strategic Chabahar Port, located in the south-eastern Iranian Province of Sistan and Baluchistan that provides access to high seas.

India Shipping Ministry said on Monday that it has now officially taken over the operations at a part of Shahid Beheshti port. “India Port Global Chabahar Free Zone carried out its first cargo operation by discharging the imported cargo (ex Brazil) using pneumatic un-loaders”, read the statement referring to more than 70 tons of corn.

ICC President, Shafei, says India has extensive projects planned for the development of the port that “makes the Indian goods more competitive in terms of price when it enters Central Asia 500-million-strong market through transit via Iran railways,” added the head of Iran’s private sector body.

India is to equip and operate two berths in Chabahar Port Phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease.

According to the Shipping Ministry's statement, India has allocated 21.5 million dollars to develop the two berths in 2018 and 19.

Industrial parks and joint ventures construction in Chabahar Free Zone can transform the region into a powerful economic hub for India, Shafei said.

Tehran is also pushing forward for a Preferential Trade Agreement (PTA) with New Delhi, the basis of which is already prepared, according to ICC President, Shafei who added: “This can rapidly developed bilateral Iran-India economic relations, increasing the trade volume to up to 30 billion dollars.”

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